Watch out below! Resource stocks are set to take a tumble as our market is poised to open in the red this morning.
The futures market is pointing to a 0.6% fall at the open for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) as overnight markets made for grim reading. US and European equities suffered sizable losses and commodities took a dive on the back of a strengthening US dollar.
Surprisingly the gloom didn’t extend to iron ore, which notched up its fourth day of gains as it rallied a further 2.6% to $US62.78 a tonne.
This should provide some support to our big miners and to Fortescue Metals Group Liimited (ASX: FMG), which can’t stay out of the limelight.
Fortescue first captured headlines by trying to instigate the federal government to launch an inquiry into its bigger rivals, before speculation that Chinese entities were lining up to buy a bigger stake or make a takeover of the iron ore company.
Unfortunately for other miners and oil companies the 2.8% slump in the West Texas Intermediate (WTI) crude oil price to $US58.03 a barrel will not have a positive effect on their share prices.
This could be just the profit-taking excuse investors need for energy company Santos Ltd (ASX: STO) following its 17% rally since April, or for copper miner OZ Minerals Limited (ASX: OZL) given its more impressive 24% surge over the same period.
Paint company DuluxGroup Limited (ASX: DLX) will also weigh on the index as the stock goes ex-div, meaning it trades without its dividend entitlement, while homebuilder Devine Limited (ASX: DVN) is likely to face selling pressure as management calls off the potential sale of the business as it couldn’t find anyone willing to offer a good enough price for the company.
Shareholders of waste management firm Transpacific Industries Group Ltd. (ASX: TPI) will be hoping the company won’t also end up like a bride abandoned at the altar as management engages Flagstaff Partners to beef up their takeover defence team, according to the Australian Financial Review.
Elsewhere, staffing and project services group Programmed Maintenance Services Limited (ASX: PRG) will be in the spotlight as it hands in its full year profit report. Investors will also be keen to hear about its reinvigorated attempt to acquire Skilled Group Ltd. (ASX: SKE). I see value in Skilled at current prices.
Banking and insurance company Suncorp Group Ltd (ASX: SUN) will also have a chance to update shareholders as it holds its investor day this morning, while cement supplier Adelaide Brighton Ltd. (ASX: ABC) and Asian property website operator iProperty Group Ltd (ASX: IPP) will host shareholders at their annual general meeting.
Today might not be a good day for investors, but at least it will be an interesting one.
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Motley Fool contributor Brendon Lau owns shares of SKILLED Group Limited. Follow me on Twitter - https://twitter.com/brenlau
The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.